Engstrom Auto Mirror Plant: Motivating in Good Times and Bad

Milestone Two

Haylee Folden

Human Behavior and Organizations

Gina Miller

11 November 2016

        In Michael Beer and Elizabeth Collins’ “Engstrom Auto Mirror Plant: Motivating in Good Times and Bad” there are many organizational issues that occur. These include, low employee morale, decreased employee productivity and unmotivated workers. The article starts by describing the issues the plant is having with things such as low productivity rates and very unhappy employees and customers. As the study develops the Scanlon plan is introduced and its’ planned outcomes are explained. Workers at the auto plant are clearly excited for the changes and the opportunity for bonuses based on higher work quality and efficiency. After some years of the program though, things began to shift for the worse as bonuses started to disappear and production started to dive again. While there are many causes to organizational issues in a company, the main root causes in “Engstrom Auto Mirror Plant” are lack of trust, fear of job loss and poor communication.

Lack of trust is a large root cause for the issues at Engstrom both before and after the Scanlon plan was put into place. Regardless of how much communication the management felt they were giving to employees, the employees still had a trust issue with what they were told. “Although all employees received a detailed explanation of the process and could easily access the bonus calculations, some employees thought that the company might be ‘playing with’ the numbers” (Beer 5). This lack of trust clearly stemmed from a wage standpoint for the employees, their bonuses had been changed so they felt that they were being shorted. Unfortunately this was due to an economic down turn that could not have been predicted and would have happened with or without the Scanlon plan.

        Newstrom (2015) describes mutual trust as “joint faith in the responsibility and actions of the parties involved” (279). The employees at Engstrom do not have this faith in the management and so their work suffers. When this occurs the management begins to lose their faith in the employees causing a strife and poor production numbers. This human behavior concept when poorly aligned clearly creates issues among a business. Loss of trust as shown in Newstrom’s work means that the employees do not believe that they can depend on the company to provide what they need. In order to fix these issues management and employees will need to work together in order to find a solution to the problems.

Another root cause of the organizational issues in the “Engstrom Auto Mirror Plant” article is a fear of job loss. This occurs after the Scanlon plan has already been put in place but layoffs have started to occur with an economic down turn that began around 2006. “The layoffs, when they finally occurred in mid-2006, shook the confidence of even the most fervent Scanlon proponents among the workforce” (Beer 6). This shows that the employees started to become concerned with how well the Scanlon plan was working and the security of their jobs. If an employee is constantly concerned that they are going to be the next person to lose their job, their performance is going to suffer and this is one of the root causes for organizational and production issues.

Negative reinforcement is being given to the employees at Engstrom by not getting their bonuses and also by seeing their co-workers being laid off. Negative reinforcement “is not the same as punishment, which normally adds something unfavorable” (Newstrom 127). Layoffs can be considered negative reinforcement or punishment depending on the side you’re on, being laid off or seeing co-workers leaving the company. This is important to the morale and production of the company because a fearful employee is going to have a hard time doing good work when they are constantly concerned for their job.

While communication was one of the key things that were implemented in the Scanlon plan, complacency from both management and employees lead to some issues. A lack of proper communication is another root cause for the organizational issues and production slow down at Engstrom. “Some workers accused management of creating a ‘moving carrot,’ despite their explanations for the reductions” (Beer 6). Communication is all about what the receiver understands, and clearly in this instance the employees do not understand what the managers are trying to convey. This is important for the success for the company because clearly the employees don’t have an actual understanding of why their bonuses have been reduced.